Agriculture industry wary of merging trade agencies

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If the proposed trade agency merger goes through, the White House says it will save some $3 billion over a decade and mean the government employee roles would shrink by 1,000 to 2,000. To put the $3 billion in perspective, the Pentagon alone is expected to spend around $6 trillion over the next 10 years. The government’s annual budget is between $3.5 trillion and $4 trillion.

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Greg Yielding, who heads the Arkansas Rice Growers Association, has been working for years to open China to U.S. rice exports. He expressed relief that the FAS was left off the proposed merger roster. “Based on initial information, we understand that the FAS and agricultural trade offices in the embassies and consulates around the world will not be included in the plan to merge trade agencies. If that’s true, we’re very happy.”

However, Yielding is “really concerned that USTR has been drawn into the consolidation. The USTR representatives do have a role in trade negotiations and are especially important with WTO issues and minimal access concerns.

“Agriculture is much different than the rest of the United States export business. You’d hate for agriculture, manufacturing and all the rest to be under the same roof. I worry that doing that would mean losing expertise that is vital for U.S. ag trade.”

Lorena Alfaro, Washington representative for the American Soybean Association (ASA), has many of the same worries. With details of the newest proposal by the White House not released, Alfaro says the Obama plan still needs to be fully assessed “but we have concerns that it would impact agricultural exports.

“That’s mostly because the USTR is already a very lean, very effective and very efficient trade agency. It has the mission of negotiating trade agreements and enforcing them. In essence, USTR opens foreign markets for all U.S. products.”

That unique role “has been very beneficial for U.S. agricultural exports,” says Alfaro. “Having USTR subsumed under a broader government agency would, we believe, impact its ability to continue to play a coordinating role in terms for effectively negotiating trade agreements and eliminating market barriers and so forth.”

USTR’s gravitas, in part, stems “from its position within the executive office of the president,” says Alfaro. “The USTR is an ambassador of the United States and that lends it credibility with foreign trading partners. That credibility would be weakened” if the proposed merger goes forward.

Alfaro says 95 percent of the world population and about 80 percent of world’s purchasing power are outside the United States. Largely, “our growth will come from trade and more exports. USTR is uniquely positioned to open those markets not only for agriculture but all U.S. businesses.

“Considering the current global economic conditions, this is not the time for U.S. trade policy to be under a commercial or industrial agency. Agriculture in particular has a great track record in terms of boosting the U.S. brand abroad.”

Soybean exports have nearly doubled in the last 10 years alone. “That’s impressive and is partly due to USTR’s diligent work in eliminating trade barriers, opening foreign markets and negotiating Free Trade Agreements (FTAs).”